Tag: CEO

In this short video, Bob Iger, Chairman and CEO of The Walt Disney Company, discusses Disney’s New Streaming Services and the future of Digital Media and the unbundling of Cable TV content.

Bob Iger has something to say about how Disney is looking ahead at this inevitable future. Disney owns some (most?) of the most valuable entertainment content assets out there and from that perspective, Bob Iger’s comments are invaluable. Disney, which also includes ABC, ESPN, Pixar, and the new Star Wars and Marvel franchises, according to Bib Iger, is well-positioned for the general move towards cable unbundling. However, the major Pay-TV providers business current models around bundling, including Disney, are certainly being disrupted by OTT (digital over the top). As we all know, OTT has been touted as the Holy Grail for the future of TV and video.

Which would prefer? Pay for only the content you consume or overpay for content bundles that include programming that you don’t care about? Sounds like a no-brainer so why not cancel your cable subscription in favor of Netflix, Amazon (Prime) or Hulu? Perhaps ~$10 a month vs. ~$70 a month? According to Tech Crunch “In a simplistic generalization, unbundling would remove the subsidization of pay TV, banishing the requirement for every pay TV subscriber to bear the cost of content that only a portion of the subscriber base actually wants and consumes, e.g., sports content, typically the most expensive channels.”

Watch this short video to hear what Bob Iger has to say about unbundling contnet, the current and future state of the entertainment industry, and what Disney’s position is on all of the above.

Larry Page, CEO of Google, talks with Charlie Rose about where Google is headed.

Onstage at TED2014, Charlie Rose interviews Google CEO Larry Page about his far-off vision for the company. It includes aerial bikeways and internet balloons … and then it gets even more interesting, as Page talks through the company’s recent acquisition of Deep Mind, an AI that is learning some surprising things.

A few years ago I sat down with Starbucks founder Howard Schultz in his Seattle office to discuss the challenges of being a CEO. At one stage I asked whether he felt there was a disconnect between the person he would like to be and the persona he needs to project while running a public company. Serving as a CEO, he said, “has been difficult—and lonely.” Yet he’d found that it was indeed possible to be values-driven while also winning Wall Street’s respect. “But the only ingredient that works in this environment is performance—so we have to perform.”

Schultz has delivered on both fronts. He has become increasingly progressive, speaking out on topics ranging from presidential politics to gay marriage. And though that might make some shareholders cringe (and others applaud), he has resoundingly—and consistently—come through for investors. As a result, Schultz has earned a spot (#54) on our list of the 100 best-performing CEOs in the world. It’s a varied ranking, whose honorees represent 22 nationalities and countless personal values and styles. Another Seattle-based CEO, Amazon founder Jeff Bezos, comes out as #1.

How do you measure a CEO’s worth? We decided to approach the task scientifically, basing the ranking on hard data, not on reputation or anecdote. Specifically, we looked at the increase in total shareholder return and market capitalization.

How We Calculated the Rankings
We also focused on long-term—or at least longish-term—results. Our rankings consider the performance of active CEOs over their entire stints, and we’ve included only those who have been in their jobs for at least two years. (The median term for all the CEOs we studied is seven years.)

The top CEOs have undeniably been effective. The top 50, on average, have delivered total shareholder returns of 1,350% (adjusted for exchange-rate movements) during their time on the job. That translates into an annual return of 26.2%. Adjusting for industry effects, average total shareholder returns for the top 50 are 1,161%, and for country effects, 1,087%.

We acknowledge, of course, that being a good CEO is about far more than just investment performance. Leading a company and creating value depend on many skills that are hard to measure—strategic vision, authenticity, long-term planning. And investors certainly aren’t the only stakeholders that need tending to; the best-run companies connect effectively with customers, employees, and the communities where they operate.

But we want this ranking to be as objective as possible, so we’ve put a premium on what we can measure precisely. Someday, we hope that there will be equally concrete ways to account for “intangibles”—environmental impact, employee satisfaction, customer engagement—so that we can confidently add that data to the formula. Until then we can only supplement this list with parallel data that tries to track some of these “softer” attributes.

Along those lines, we asked the Reputation Institute, a reputation management consultancy, to rank our top 100 CEOs in terms of these other skills—work environment, citizenship, governance, leadership, and so on. The results suggest, I’m afraid, that doing well doesn’t correlate much at this stage with doing good. That said, a few superstars scored high across the board, including Bezos, who, despite Amazon’s well-publicized entanglements with publishers and authors, was #4 on the Reputation Institute list. (Schultz finished in the middle of the pack.)

What else do we know about the CEOs on this list? Most are men—only two women, Debra Cafaro of Ventas and Carol Meyrowitz of TJX, made the top 100—and the median age is 59. (This is similar to what we see in the entire group studied, in which 3% of CEOs were female and the median age was 58.)

Thirteen CEOs are of nationalities that differ from their companies’. (Though it’s still not a global market for CEOs, that figure is more than double what it was in the 2013 version of this ranking.)

And while the top 100 have each experienced their own unique journeys to success, there do seem to be two preferred pathways. Over a quarter of the CEOs have MBAs, and nearly as many had studied engineering.

We also looked at CEO pay, to see how that related to performance. To do so, we worked with Equilar, a company that collects information on compensation, to tally the most recent pay packages for the top 100. These elite CEOs are very well paid, as are most CEOs. But on average the executives on our list receive more of every form of compensation than their peers do.

Disney’s Bob Iger, #60 on our list, is the highest paid among our 100, with a total package of $34.3 million. That doesn’t make him the world’s best-paid CEO. In fact, according to Equilar, 13 CEOs earned more, led by Charif Souki of U.S. gas developer Cheniere Energy, whose 2013 compensation totaled $141.9 million.

So what’s the ultimate takeaway from this ranking? In many ways, Bezos’s place atop the list says it all. Here’s a CEO who has frequently underperformed in the short term while continuing to make big bets on the future. Amazon often reports quarterly losses, even as sales continue to rise. And though the company is subject, like many firms, to dramatic share-price swings, Amazon and Bezos have a long-term track record of delivering shareholder value that is second to none.

Why Engineers Make Great Leaders

Twenty-four of HBR’s 100 best-performing CEOs have undergraduate or graduate degrees in engineering, compared with 29 who have MBAs. (Eight CEOs have both degrees.) At technology or science-based companies, it’s not a big surprise to find an engineer at the helm. But engineers thrive at the top of other kinds of firms, too: Examples include Carlos Alves de Brito of brewing giant Anheuser-Busch InBev, Jeffrey Sprecher of the financial services firm Intercontinental Exchange, and Kari Stadigh of the insurance company Sampo.

What makes an engineering degree useful to people leading a business? “Studying engineering gives someone a practical, pragmatic orientation,” says Nitin Nohria, the dean of Harvard Business School, who holds an undergraduate degree in chemical engineering from the Indian Institute of Technology, Bombay. “Engineering is about what works, and it breeds in you an ethos of building things that work—whether it’s a machine or a structure or an organization. Engineering also teaches you to try to do things efficiently and eloquently, with reliable outcomes, and with a margin of safety. It makes you think about costs versus performance. These are principles that can be deeply important when you think about organizations.”

Executive recruiter James Citrin, after examining the list’s numbers, notes an interesting trend: CEOs who were hired into firms as outsiders were more likely to have an engineering degree than insiders who were promoted into the job. “That connects with my experience,” says Citrin, who leads Spencer Stuart’s North American CEO practice. “When boards are making decisions, and they know it’s riskier going outside, it often gives them comfort if a candidate has studied engineering.” Why? Citrin says engineers excel at “architectural thinking” and logical problem solving. The only downside of an engineering background, Citrin says: It might be a small strike against a candidate who wants to lead a company in a creative field such as fashion or advertising.

How They Stack Up on Pay

One of the downsides of a global CEO ranking is that it’s difficult to offer a comprehensive comparison of these leaders’ pay, because countries require different levels of transparency with executive compensation. With help from the compensation analysis firm Equilar, we compiled pay data on 68 of our top 100 CEOs. (The remaining 32 are based in countries that lack public data on executive pay.)

This is a small segment of this article. To see the full article click here.

It’s Sunday evening, and Nadella is sitting in a glass-enclosed room at the back of a Japanese restaurant in San Francisco’s North Beach neighborhood, eating sushi with a few reporters. As the meal began, one reporter promptly asked “how many women report to him and how many have asked for a raise,” cutting straight to the CEO’s recent public gaffe where he advised women in the tech biz to trust “karma” if they don’t get the pay they feel they deserve, and though Nadella and his PR handlers have kept a tight lid on any discussion of this incident—and his subsequent apology—he’s somewhat freer in addressing another hot-button Microsoft issue: the Linux open source operating system.

Or at least, it used to be a hot-button issue. As Nadella says, he’s not interested in fighting old battles like the one with Linux, the rival to Microsoft’s Windows operating system that former CEO Steve Ballmer once called a “malignant cancer.” In fact, he makes it clear that Microsoft must embrace Linux—and change in other big ways—in order to compete in the modern tech world. Linux, you see, is now an enormous part of the way businesses build their websites and other online software, and Microsoft wants these businesses using its big bet on the future of information technology: the cloud computing service known as Microsoft Azure. “If you don’t jump on the new,” Nadella says, “you don’t survive.”

Part of an enormous shift towards cloud computing—a shift driven by several tech giants, including Amazon and Google—Azure is a way of renting computing power over the internet, without setting up your own hardware. About two years ago, Microsoft revamped the service so that anyone could use this computing power to run Linux as well as Windows, and though the move was hailed by pundits, many still questioned whether it would work—whether people would actually choose to run the open source OS atop a Microsoft service. But, sitting in this high-end Japanese eatery, Nadella reveals that Linux now accounts for 20 percent of all activity on Azure.

The next morning, he’ll say the same thing in public, as he lays out the broader strategy for Microsoft’s cloud computing service at an event in downtown San Francisco. “Microsoft loves Linux,” he’ll proclaim with a smile.

For those who watched Microsoft’s long battle with Linux, it’s still a surprising thing to hear, and it’s indicative of a much larger transformation at Microsoft. The company is not just running Linux atop Azure. It’s offering a version of its Microsoft Office suite for Apple mobile devices. It’s providing a free version of Windows, echoing Google’s Android operating system. It’s open sourcing many of its own software tools. And as Nadella points out, it’s partnering with rivals such as Workday and Salesforce atop its cloud services.

None of this seemed possible during the reign of Steve Ballmer, and so much of it happened on Nadella’s watch, in the months since he took over the CEO post this past February and during his time running the company’s cloud group. Nadella doesn’t take full credit for this shift. But he certainly believes it’s the best way forward for Microsoft—and it is.

What Nadella realizes is that in today’s world, businesses and engineers and consumers use such a vast array of hardware devices, online services, and software tools—and that these arrive from so many different sources: Apple, Google, Amazon, Microsoft, open source projects— and the list goes on. That may not have been the case 20 years ago, during Microsoft’s heyday, but it is now.

As Nadella says, the tech future will not be “winner take all.” And in order to win at least part of this future, Microsoft must concede as much as it takes.